Economic secretary to the Treasury Justine Greening today ruled out a key demand of the travel industry’s Fair Tax on Flying campaign when she said Air Passenger Duty (APD) rates would not take account of the costs of airline emissions trading from next year.
All airlines flying within and to the European Union will join the European emissions trading scheme (ETS) in 2012.
But Greening told the Abta Travel Matters conference in London: “The emissions trading scheme will be in addition to APD. ETS is seen as separate to APD in terms of revenue.”
She added: “APD represents a £2.6 billion [annual] tax take to the Treasury. Emissions trading is expected to raise £160 million.”
When it was pointed out Treasury forecasts suggest APD will raise £3.6 billion a year by 2015, Greening told the conference: “It is not easy to move away from the tax take already baked into our figures.”
Then she added: “Unlike other countries, there is no VAT on air fares in the UK. You have to look more broadly at tax questions.”
Greening refused to comment on remarks attributed to Cabinet Office minister Oliver Letwin. London Mayor Boris Johnson reported Letwin as saying he did not want to see “more families from Sheffield able to afford cheap holidays abroad”.
Greening said she had not seen her colleague’s comments,adding: “We know it is important for people to be able to have holiday.”